(By Balaseshan) NetApp Inc. (NASDAQ: NTAP), a provider of storage and data management solutions, reported a 33.8% drop in quarterly earnings due to higher costs and expenses. Results beat Street's expectations, sending its shares up 9.10% in aftermarket.
Earnings for the second quarter were $109.6 million or $0.30 per share, down from $165.6 million or $0.44 per share last year. Adjusted earnings per share (EPS) fell to $0.51 from $0.63.
Revenues increased 2.3% to $1.541 billion.
Analysts, on average, polled by Thomson Reuters had expected a profit of $0.48 per share on revenue of $1.54 billion for the second quarter.
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Product revenue declined 2% to $995.8 million, while revenue from software entitlements and maintenance grew 10.8% to $219.4 million. Service revenue increased 11.3% to $326.0 million.
Looking ahead into the third quarter, the company expects adjusted earnings of $0.53 to $0.58 per share and revenue of $1.575 billion to $1.675 billion, while Street predicts profit of $0.54 per share on revenue of $1.62 billion.
NetApp estimates that share count for the third quarter to decrease to about 365 million shares.
NetApp also said it will continue its share repurchase program with an additional $1.5 billion authorized. Under this program, NetApp can purchase shares of its outstanding common stock through open market and in privately negotiated transactions at prices deemed appropriate by management. The purchases will be funded from available working capital.
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NTAP closed Wednesday's regular session up 3.01% at $27.12. The stock has been trading between $26.26 and $46.80 for the past 52 weeks.